Derivatives (futures and options) are high risk-high return investment. Therefore, it is essential for the derivatives market to prepare a guarantee system to ensure the fulfillment of settlement obligation in case of a large amount of loss. As the futures trading has long time period until the settlement after the contract, the KRX requires investors to deposit margin in case where the futures price changes unfavorably.
As the margin is a deposit for the fulfillment of settlement obligation, it is classified, according to the payer, into customer margin and member margin. The customer margin is paid by investors to the member and the member margin is paid by members to the exchange.
- Margins can be paid with, instead of cash, substitute securities and foreign currencies as follows:
- Θ US dollar, Θ Japanese yen, Θ EU euro, Θ British pound, Θ HK dollar, Θ Australian dollar, Θ Singaporean dollar, Θ Swiss franc, Θ Canadian dollar